The House That Jack Didn't Build

I grew up in the long shadow of Peter Rachman. He was a notorious private landlord in London who exploited the poor and tyrannised his tenants. Rachman reigned even in a time of relative council house plenty.

Mrs Thatcher’s determination to widen home ownership in the 1980s effectively gave much of the housing stock to the then existing social housing tenants. Very little capital was retrieved from council house sales – there was thus neither the money nor the will to start much of any kind of a national house-building programme to make good the loss of stock.

Housing benefit is in chaos because this new breed of ‘home provider’ has been taking the swag and running; and because the market is so badly skewed by the lack of building. Hence the landlords have this market by the toes.

It remains to be seen whether, in the absence of a house building drive by the state, these people with their inflated rents can seriously be beaten down. The Work and Pensions Secretary says he hopes that they can be.

UKPLC’s failure to build houses in the past three decades speaks volumes about who can be trusted to deliver social housing. Is it too fanciful to suggest that housing is an inalienable human right – that any society that reflects the need of its people must answer with basic provision?

Whatever Iain Duncan Smith does in his White Paper today, few think he will cure the UK’s housing disaster. So who, or what, will?

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60 reader comments

Paul Begleysays:

A few points:

1/ As I remember, local councils were explicitly prohibited from spending “right-to-buy” receipts on building or buying social housing. The reliance on Bed & Breakfast accomodation for emergency housing stemmed from this.

2/ The biggest driver for “buy-to-let” was the collapse of other saving/pension options, particularly the scandal of mis-selling personal pensions in the mid 1990’s. There will be a few “buy-to-let” billionaires, but my guess is the typical landlord has fewer than five properties.

3/ There is a great deal of mood music about the immorality of the public spending deficit, and how future generations will have to pay for our public services. Effectively, our current housing market is doing exactly this in the private sector – people in their twenties renting their first home must first fund their landlord’s pension scheme, before saving for a deposit for a home of their own. Didn’t I hear that “unsupported” first time buyers (those whose parents cannot subsidise) now have an average age of 38? Does the anger of students, expected to take on £30-40,000 education debt as well, make more sense now?

“Whatever Iain Duncan Smith does in his White Paper today, few think he will cure the UK’s housing disaster. So who, or what, will?”

The situation looks dire to me – because for most of the people who thought that they were earning their success by working, their personal standard of living is actually based on the capital gain on their property since they bought it five or ten or twenty years ago. Very little of this is owned outright, most is mortgaged as a result of “trading up” or to release funds for consumer spending. So a lot of wealth has been pulled out of those houses based on their value in a market where the prices were pumped up by creating a scarcity at the bottom. Try to correct that, and negative equity could destroy the lives of many.

Paul, an excellent summary if I may say so; I sort of recalled your first point but wasn’t sure – thanks for confirming that. Thatcher didn’t believe in “society”, so the concept of “social housing” was alien to her. I heard that she believed in “the trickle-down effect” but I don’t understand how this was supposed to work.
” Verbosity”? No. Just thanks for the fluency & clarity of your argument. I worry desperately about my grandchildren’s future education – in 6 years’ time my grandson could be wanting to go to university, like his parents. Heaven knows it was hard enough for me to contribute my share of just the Maintenance element of my daughter’s grant; tuition fees on top would have been a nightmare & could well have adversely affected her future, by dissuading her from taking up her place. She worked during every single vacation; how can present-day students do that, given the scarcity of jobs?

I think the only inalienable human right is the one of a child to have good parenting. Children don’t ask to be brought into the world, and they have a right to expect the people that did bring them into the world to look after them and give them a good start until they are old enough to fend for themselves. Anything after that is a bonus, in my opinion, to be achieved by a mixture of hard work, good luck, good behaviour, and other things, but not a ‘right’. Ultimately, people have to make their own way in the world.

And if parents lose their jobs and their homes, don’t you think this will impact on the children? Yes, rights are political but our politics depends on what kind of people we are and want to be – personally I prefer, compassionate, caring and altruistic based on the fact that we are all inter-dependent and can’t live lone – clearly you prefer a self-centred each-man-for-himself mentality. But ur right, it’s a choice each of us has to make – perhaps you’ll change ur tune once you lose ur job and can’t get benefit. Oh… I see.. you’re a millionaire like Clegg and Cameron. That’s ok then

‘Ultimately, people have to make their own way in the world.’ Perhaps you should read the article again. Society, politics and economics are a little bit more complicated than that or is the ‘man making his own way’ unaffected by all of that? Is the man who can no longer buy food in the developing world unaffected by commodity speculation. Is the ‘man making his own way’ unaffected by poor government policy and house price speculation? There are a million similar questions but I imagine they could all be responded to with ‘Ultimately, people have to make their own way in the world’. If only reality was as simple as that.

Some parallel with British Rail. Thatcher did not invest in the railways and it was a disaster area when the labour party gained ‘power’. It appears that there has been a significant improvement in rail transport (choice, improvements in routes, rolling stock etc, frequency and reliability). This was done through quasi privatisation wasn’t it?. The model appears to have worked….agreed?

Perhaps this is the way forward and the goverment should do the same with housing. A massive building programme using local housing associations in partnership with the government?

Extend this private/public model to healthcare, education and road transport BUT without ripping off the electorate?

And where do you place incidents like Potters Bar? Network Rail had to return to in-house maintenance because private companies like Jarvis were, to put it mildly, unreliable.

Councils didn’t actually build houses, they paid for private companies to do so. (Remember Ronan Point, the tower block that collapsed? Someone, somewhere, taking shortcuts to improve profits? Cheap substitute materials, poor finishing?) Same with Housing Associations, but these need funding from somewhere & they don’t have anything like the resources of Councils.
The only private company I can think of that builds predominantly for the social housing sector is Carillion, & I don’t think it’s doing too well at the moment.

I spent years living in Bed & Breakfast in the late 80s in a single room, on housing benefit costing £70 a week – I got my first social housing flat at 24 at a cost of £24 a week; unheard of now, of course – giving someone a flat at 24 or even up to 35… With my own space I was able to get myself into college (mind you under the GLC it was £1 to do unlimited adult ed courses then if unemployed) & now have 4 degrees, a PhD – It would be impossible now – and unaffordable – and I couldn’t have done it without the space and the escape from the worse room (the b&b) in the world – full of junkies and severe mentally ill people kicked out (by the tories) from the hospitals. To those nostalgic about the 80s – Welcome Back!

This government won’t help, though not “because of the deficit”, but because they believe in the Market and that the Market will provide a solution. That the government are ignoring the major role that the housing market has played in two out of the past four recessions is a good indicator as to how zealously they _believe_ in the Market. Much as with tuitions fees, and so many other policies, you can’t vote to change the believers because all parties are happy to sacrifice everyone else’s family on the Market’s alter.

Somewhat not-for-profit groups (which used to include government) such as homeless charities, or a rebirth of building societies might drive the creation of more affordable housing, but I’ve yet to see any sign that this might happen in this side of 2020.

I know this is a democracy, but with few exceptions the British public has to lead our political class. We need more affordable housing our we’ll be back to renting like serfs within a generation. Everyone know this is a problem, so politicians run commissions and promise action, but all shout to nothing.

As you have outlined it is a difficult problem.In some ways i agree it was started by Mrs Thatcher giving people the right to own there own homes.That was an admirable policy but unfortunately councils were not allowed to use the proceeds for new build.Now they do not have the money nor the inclination to build.The last government was busy trying to persuade councils to put their housing stock into arms length management associations(ALMO).I have done a lot of research onALMO’s and believe they are a precursor of a housing association.If that is the case , it would seem existing stock would then become belonging to Housing aSSociations .They are under pressure financially so where is the new build to come from ??
In my opinion it can only come from the private sector, who will in turn want a return on its investment.
There is a lot of untenanted housing available but in need of repair.The first task of government and councils should be to bring that stock up to livable standard

I think you miss the point of all this extreme right wing policy-making, including the destruction of social housing.

These policies are intended to deprive our people of strong democratic action via government, the only way individuals can aggregate their wishes. “Right-to-buy” and “buy-to-let” are merely contricks to try to stop the whole concept of co-operation in society. Thus it is inevitable we will see a return to the Rachmanism you describe, the very system that created slum properties and inner city decay in the first place.

The great reforming Labour government came into power on the backs of this and the realisation that cynical profiteering old men had brought our society to its knees in war and misery. This is why Aneurin Bevan was a great hero – he knew and engaged the enemy without fear.

CamClegg/New Labour are now that enemy and always will be. Only the sophistries have changed.

It seems now the lessons will have to be learned all over again. One hopes they will be applied with equal fervour. But this time without repeating Clem Atlee’s mistakes.

Well done with the Rachman analogy. Those who forget the past are condemned to relive it.

Philip , which great reforming Labour government are you referring to? I have lived through a few , only to see our lifes almost wrecked through their debts and inability to run anything.Bevan a great hero?? Look up the word hero.He was in the main a left wing agitator , whose only claim to fame was the NHS.He was never a leader of the Labour Party.
I have yet to see a Labour government that has persued the building of Council houses , except at the end of the second world war , when numerous sub standard pre fabs were built.
What is Social housing? Houses built by the state? Why should the state invest in housing ? Governments are incapable of running such schemes from Whitehall.It should be up to local communities to provide the means for social housing , and because of empire building , most local councils are full of high earning managers who think more of their own positions than serving those that elected them

“…local councils are full of high earning managers who think more of their own positions than serving those that elected them”
This can be true at any level of government, and it seems a consequence of how we organise and conduct politics, i.e., everything is a “game”/scheme were the best way to survive is to become an expert in cheating/loopholery.

Corrupt councillors can produce low cost housing that is as bad as any Rigsby (well a successful Rigsby), but we have learned to not allow councillors to control housing (e.g., as well as Labour in the 60s/70s there is also Westminster council’s social cleansing) and that should not stop us from trying to ensure there is affordable housing for every hard working citizen.

We should all invest in housing because the property boom and bust costs the country untold billions of everyone money. The state should build affordable quality housing because it makes for more home owners, which indirectly leads to lower crime and more cohesive communities. The market, communities, and individuals have had thirty years to step in to the social housing vacuum, and failed.

I’d be happy with local people getting involved, but I can’t think how?

Peter i agree with you.I’m not sure how they would be run ,but perhaps one way forward is local co operatives.If followed up i am sure local councils would only too readily offload their council stock.The only problem is the substandard housing

What you didn’t mention was the scenario ,* have lost my job , can’t afford my mortgage and have to live with relatives , whilst I let my house out so that I won’t have lost everything due to the bad management and economic crisis .pleural. of the last few decades.

What you also fail to mention is that many who partly own houses are very poor, whilst those who are living as tennants , have brand new cars , go abroad 3 times a year , smoke , drink and have a good social life. Some landlords have the only thing that matters to them i.e. leaving an inheritance to their children , which in turn takes the weight off the state, whilst they themselves do not have the luxuries of their tennants.

In Scotland council houses (i.e social housing if you must) are being built by the SNP Governemnt in partnership with the local authorities. In some places, for example, Edinburgh and Aberdeen, they are getting their first council houses in 30 years.

Furthermore the Scottish Government has just successfully steered a Bill through the Scottish Parliament to stop the ‘right-to-buy’ for these new houses thus ensuring that they are available for successive tenants in years to come.

The actual numbers of council houses being built in Scotland is now at its highest for 20 years (ca 3ooo) albeit it started from a near zero baseline. It does equate to several thousand houses and helps to support jobs in the construction industry at a difficult time.

The Coalition Government’s policy on housing is short sighted in so many ways and one wonders what the knock on effect will be.

I agree with a lot of this Jon, but you’ve missed out the other main act of the Thatcher Government that is at the root of all this – the Housing Act 1988. This abolished rent control, so private rents were free to rocket to the levels we see today, and introduced the Assured Shorthold Tenancy, so that renters had very little security of tenancy. This is why we’re now so obsessed as a nation with owning our own homes – renting’s great if you’re young and need flexibility to move around a lot for work or study, but if you’ve got kids, you don’t really want to risk being forced to move every year if you can avoid it. (And that’s before we get into the fun you can have with dodgy letting agencies, and landlords who never do repairs) That’s why we don’t have the same culture of renting as they do on the continent.

I despair of the lack of joined up thinking on Housing and Welfare shown by this Govt so far. Cutting building social housing reduces longterm HB savings, and increasing social rents to 80% of market rents will mean more HB claimed. Capping HB forces people away from where the work is, and increasing fares means they can’t afford to travel to work, so unemployment beckons.

Well said. I would just add one point – at the age of 51, I’ve relocated four times in the past decade because my “profession” is almost entirely funded on short (2-3 year) contracts. It does give me an experience more like that of recent graduates – in work I’m well-paid, but the lack of job security traps me in the highest cost housing, and precludes “building a life”. Casualisation of work hasn’t only hit the younger generation, although the problem is most acute for them.

My view is that the housing situation in the UK is in such a dire state of affairs because the rich are now able to get even wealthier through unprecedented technolgy and the needy are forgotten or ignored at just the same speed. This then leads to more crime being committed and the whole system slowing down even further.
Top quality housing as with healthcare & education should be on tap for all those who genuinely need it.
Scotland look like they are making some progress in the housing area so good on them!
adzmundo TVP

One has to really wonder at the depth of disdain showed by the Condems to those who least deserve it,to have people living in fear for there future, can they really sleep at night.
I am sure that people will not survive…ie I anticipate an increase in the suicide rate though I doubt it will be reported.
I appreciate your sentiments and those of other posters the housing situation is an inditement of the callousness of the powers that be.
why not ask the chinese to invest here…

Excellent interview of Lord Freud by Kirsty Wark this evening, which highlighted the fact that LOTS of claimants volunteer already (because it was a requirement of the New deal programme) and that claimants with children are unlikely to face effective sanctions (because the government isn’t about to penalise children).

It also looks like Lord Freud has finally started to realise that a lot of the problem rests with employers, who would rather hire cheap migrant workers than grant an interview to an applicant on benefits.

Jon, I watched “Britain’s £4 Trillion pound debt” last night and I wanted to pass on my compliments to C4 for making (and showing !!) such a program. I can’t imagine the BBC ever broadcasting anything like that.

To me it rammed home the total disconnect that the public and politicians have about what money is and how it works. To us, it seems, it literally does grow on trees. Except it isn’t worth anything. The huge debt is worth something though, a lot of misery for future generations.

The killer line came from the excellent Bill Bonner (you really must interview him one day) – “…every new $ (and £) bill that’s printed is a fake”.

I watched that too, Richard. It seemed to me that the “slash the state” tendency were making their usual mistake – confusing the reporting system with the reality.

Here’s a simple example. No-one can actually make a profit in business without relying on literate, numerate workers to create and deliver their product. So educating people makes it possible to create wealth. However, most of that education (at least pre-university) is delivered by the public sector. We’re expected to believe that this is a profligate waste of money (what the “private good / public bad” model asserts) rather than a necessary investment.

It’s always a good idea to take whatever explanation you have for how things work, and see if it fits the evidence:

Are the privatised utilities delivering better value to customers than they did when nationalised? No

Has the market delivered affordable, flexible housing for the demanded flexible workforce? No

Do private healthcare systems cost less than the NHS? No

Eventually, if reality refuses to fit, you have to change the explanation. We’ve given this thirty years – isn’t it time to reconsider?

There are a number of jobs that cannot produce income but which we wouldn’t want to be without – teachers, doctors, firemen, etc The state also empoys a lot of civil servants who are currently the target of government and many in the public but we will see how loud the complaints are when tax queries take ages to answer, when job centres are struggling through lack of staff.

I’ve also noticed that the private sector is very keen for the state to provide things they want like road and high-speed rail connections.

We don’t want profligacy from the state – fewer MPs and memebrs of the lords would be a great start – but the main thing we need is a change of attitude so that people, especially the very wealthy, see it as their duty to pay their fair share of tax. As I’ve said elsewhere, those multi millionaires with their tax havens would pay most of it over to ensure rescue if their family were trapped inside a burning building.

Richard: you have to ask yourself why this show was broadcast on C4, a network that’s relentlessly nagged the State for a slice of the licence-fee, ie public money. I got the impression that C4 were being brilliantly/deliberately cheeky. Most of the interviewiees were’nt exactly representative of the straitened proletariat; paid for either directly from the public purse or some quango-type ‘think tank’. Also, it’s easy to get some Tyneside bloke to whinge about ‘declining industry’, but who caused that decline? None other than Maggie ‘rolling back the frontiers of the State’ Thatcher.

Paul: you’re right. Picture this – the presenter argued that the State shouldn’t be paying for 90,000 road-humps. It’s a good argument, but the State also pays for big, business-to-business infrastructural links for the industrial private sector.
It’s about sensible-prioritization.They don’t seem to understand the difference between Big And Effective Central Money, and Big And Misdirected Central Money.

Axiom 1 – all money comes from the private sector.
Axiom 2 – the State should use some of this cash to facilitate the private-sector.
These statements don’t self-contradict.

Interesting comments Paul.There is no need to have literate and numerate employees to make a profit in many industries.Coal,Steel,building, manufactoring etc.If it were so half the workforce would be unemployable.Many entrepeneurs were uneducated.One only has to look at the recent student riots to see what education can produce.Educated thugs who believe they can be above the law.
If you lived through the nationalised industries.which you obviously didnt, coal, electricity , railways, all government run , all losing vast amount of money.All over manned with personel,there is no way you could ever describe them as being better than the replacement private systems.Unfortunately government , of all persuasions are incapable of running business.

Adrian, I disagree. The nearest I can imagine to your entrepreneur “who got nothing from the state” would be a foreign footballer playing in the Premier League. Even he will be surrounded by agents, PR consultants, tax advisers etc, all educated by the state. He’ll drive his car down publicly funded roads, under publicly funded streetlights, and fly home on aircraft whose engines were developed using public money (via the Defence budget). He’ll Twitter and post on Facebook using publicly funded internet infrastructure, on a World Wide Web invented by a british scientist working at CERN (mix of UK and European Union taxpayer funding).

On public utilities, the railways still receive vast amounts of taxpayer subsidy (following the collapse of Railtrack), while our gas and electricity prices are the highest in Western Europe, delivered by companies which read the meters so seldom that it is not possible to verify that their bills are accurate. My conclusion is that unaccountable private companies are just as bad as unaccountable public bodies.

Paul, I was more interested in the disconnect and lack of understanding that politicians and the wider public have with money. I’d prefer to leave the public vs private sector, 4-legs-good-2-legs-bad stuff to the political tribalists, that stuff is of no interest to me.

But to answer your questions :-

1. Are the privatised utilities delivering better value…

Quite possibly, the risk is on them to raise capital to maintain and upgrade the national grid, etc. But of course they won’t do it for free. Nor should they be expected to.

2. Has the market delivered affordable, flexible housing for the demanded flexible workforce?
The market has built houses that the property speculating public has turned into a mini-industry. Their choice, blame them.

3. Do private healthcare systems cost less than the NHS?
No, but – although I can’t confirm this – they may provide better treatment, and better aftercare (I have a friend who insists that they do).

you say “isn’t it time to reconsider?”.

Absolutely ! We can start by understanding the nature of money, credit, debt, and trust. and move away from this ridiculous notion of live now pay later. We owe that to future generations.

On top of this there’s another YouGov poll showing up how far-removed from reality the electorate are. It’s shocking and sobering that most who are asked are quite happy for punitive measures to be taken out against others (not themselves?). Would they really be happy to turn a blind eye at politically sanctioned suffering? Surely, such polls are misleading because they’re so abstract? They cannot tease out what factors lie behind the shift from blaming the financial/ political/economic decisions made at national level. Do those polled really believe that the sick (most of us from time to time), the elderly (most of us with any luck..), the poor (many us at some point – pay levels are not set by employees) and the foreign (again so many of us are 2nd, 3rd generation). This is why we need a welfare state – no-one can depend on the kindness of strangers.

I also watched “Britain’s Trillion Pound Horror Story” on C4 on Thursday evening. Although the presenter/maker of the programme was obviously very right-wing it was a real eye-opener for me.
So much so that I’ve had to completely re-evaluate my political leanings so to speak. Maybe that was part of the reason of the prog. I’ve even begun to think the previously unthinkable. Perhaps it is time to take a closer look at spending on our NHS with a view to possibly introducing fees to visit the GP for a start. That would also help to keep away the time-wasters that head for the surgery at the first sign of a sniffle. Children should always be seen free of charge and also some elderly people who may also have underlying conditions. In fact all people with known conditions should still be able to see the GP for free. I have several other ideas also, but I’ll leave it at that for now.
Except to say that this is no time for idealism. The country can no longer afford that luxury.

“In fact all people with known conditions should still be able to see the GP for free.” And how do they find out that they have an illness in the first place? By going to see a doctor when the symptoms first appear, of course. But if they had to pay for a visit, the chances are that they’d put off going until the illness was well advanced. In which case, the treatment they then require could be far more costly than if they had been diagnosed sooner. Add to that the expense of sick pay, loss of work etc and the state ends up spending far more money.

The World Wars ended a long time ago – maybe the ‘homes fit for heroes’ ethic is considered passe, and we proles can just go back to our huts, until we’re needed again. Till then, we’re just unsightly clutter.

Maybe this kamikaze Tory government (who in 2015 will want it back?), with its 1980s revenge-psychosis, thought right-to-buy was code for if-they-can’t-buy-then-kick-’em-out.

There have always been two Britains: the one of Class War and the one of the Caste System. At this rate, this country will take its place among those other ‘rich’ shanty states, India, China and Brazil.

This story is erroneous when it says all landlords are making a lot of money. I rent two double rooms in my 4-bed house with lodgers having use of my lounge, dining room and an extra cloakroom downstairs. I lose £500 a year single person discount on my rates before I start. Then I have voids and all the house maintenance. The lodgers add to your bills which are going through the roof with inflation at present but rents are not going up to compensate in my area. My water rates alone went from £80 to £240 last quarter once lodgers came in. I only get £80-90 a week rent per lodger INCLUDING BILLS for double rooms. If I want to rent my third bedroom I have to apply for planning permission now due to new HMO laws which takes months and costs £410. Every year I have to pay out for gas safety checks etc. Meanwhile my property is falling in value. Get real – the only people making out of this one is the lodgers sitting pretty in rented rooms not having to pay high house bills while they wait for a nice house like mine to come down in price so they can buy it. Do some more research! These higher rent stories are a myth. I am a qualified journalist and landlady. Miranda

“…Whatever Iain Duncan Smith does in his White Paper today, few think he will cure the UK’s housing disaster. So who, or what, will?”

The cure is simple, morally defensible, and will appeal to all right thinking people in this country: stop the tax deduction of BTL interest repayments as a business expense. This more than anything has skewed housing provision will simultaneously inflating prices. Consider that the taxpayer pays the interst on the capital borrowed and the renter pays off the capital borrowed through rent. With capital and interest paid-off, what is left for the landlord to pay? That’s right, nothing. Is it any surprise house prices are bid up to insane levels out of the reach of FTBs when the end result is an infinite capital gain on a 0% investment? Did anyone in private rented accomodation notice their rent decrease by 90% when interest rates were slashed by 90% by Labour as a vot-sop to the homeowner? Didn’t think so, but by-God watch the landlording pips squeak if the ConDem alliance had the grapes to enact this particular housing fix.

Morally defensible, and appealing to all that is, if a large majority of MPs weren’t ucomplicit house-flippers themselves…

Afew things to point out Dave,A property bought for BTL still has to be bought,probably on a mortgage.Claiming the interest on business expenses does not give 100%relief.Rents probably do not pay the mortgage.The owner is responsible for repairs,and all costs if the property can not be let.Most rental values are what working people can afford.It isn’t people renting that is the problem, it is the stupidity of those in housing benefits who agree to ludicrous payouts, so quite rightly that needs to be capped and it is inevitable that rents will fall

The existing building societies are a complete misnomer. All they and the banks have achieved is to pump credit into the existing housing stock.

My long term solution to the housing crisis would be to legislate for the creation of a new type of ‘building society’ – one that actually builds homes for people. They would be able to raise funds in much the same way as existing building societies but their remit would preclude them from facilitating the hoovering up of the existing housing stock.

They would be able to build homes for both rent and sale – they would offer superior tenancy rights and they wouldn’t just be targeted at the ‘affordable’ sector but they would be able to choose which segment of the market they wished to target so that we have housing stock being developed for both rent and purchase that would suit a range of pockets.

I would create a preferential environment for these new institutions and encourage existing organisations such as house builders, building societies and housing associations to convert to such status.

Increasing the size and quality of the housing stock would bear down on the costs of both renting and purchase over time.

Houses are massively overpriced.
Everyone I know earns between £12k-£24k per annum.

From 1987 to 1997 the Average House Price rose from £40k to £55k.

A 33.3% rise over ten years.

From 1997 to 2007, the Average House Price rose from £55k to £190k [Nationwide Building Society figures]

A staggering 245.5% increase over the same period. [Ten years.]

The reasons for this are entirely the Labour Parties Fault.

1. “In America, the Glass-Steagall Act had protected deposit-taking commercial banks from the risky activities of the investment banks. Congress was effectively obliged to repeal the Act in 1999 because New York was losing its business to London, which had no such restrictions and the “light touch” regulation encouraged by Gordon Brown. Had Britain [Brown] enacted similar legislation to Glass-Steagall, the US Act would not have been repealed, the City would have made less money but the banking collapse in both America and Britain would have been avoided”
2. Complete failure to build social housing. Labour built , an average of 26,000 fewer homes each year between 1997 and 2009. Under Tony Blair and Gordon Brown, the country witnessed the lowest level of house building in peacetime since 1924

3. The tripartite system put in place by New Labour to regulate the economy was a direct cause for the financial crisis.
The tripartite system was created when Mr Brown – as chancellor – made the Bank of England independent as soon as Labour came to power in 1997.
It included the Bank of England, the FSA and the Treasury,
Lord Vallance, chairman of the House of Lords economics affairs committee. [Tasked to look into the causes of the Crisis]
* “It is clear that in the UK the tripartite authorities of the Bank of England, FSA, and the Treasury failed to maintain financial stability, in part because it was not clear who was in charge in a crisis and because not enough attention was paid to macro-prudential supervision – oversight of the aggregate effect of the actions of individual banks – in the period when ‘boom and bust’ occured.

4.In his 1997 budget, Brown abolished dividend tax credits on pension funds. Companies saw the writing on the wall and immediately ended their final salary pension schemes to new employees shortly after the ‘Brown raid’.* The value of pension funds have since lost around £5bn per year since the 1997 tax relief cuts. Pension funds holding the cash that almost everyone in the country had planned to use for our retirement have lost around £100 billion over 12 years. [1997-2007]
The advice Brown was given by this Treasury Paper, in 1997 was as follows:

‘The changes in incentives are likely to lead to substantial changes in portfolios. Pension funds will find equity relatively less attractive, and will prefer other assets – particularly interest bearing securities and foreign equity – and may also be prompted to consider more direct property investment.’

Those funds were then channelled into fuelling an unsustainable property bubble, {BTL portfolios,} which developed because of Labours complete lack of regulation of the Banks.This was followed by rising house prices, ever increasing toxic mortgage debt, and this was followed by the bank bailouts.

Roughly 60% of houses historically acquired by First Time Buyers, were then acquired by the Buy To Let brigade. This figure rose year on year, from 1998-2003.
FTBers were priced out completely.

This is just one example of Gordon Browns incompetent decision making which helped to create the cornerstone of the debt bubble.

5.Brown had every opportunity to face the problem. Instead in 2003 Brown switched the housing inflation figures from RPI to CPI, hiding the debt. Same thing he did with PFI.

THESE are the reasons house prices rose to astronomical unsustainable levels.

Without the bank bailouts, house prices would have crashed by 60% plus.

So the only reason they have not crashed is because of Government theft of our taxes and QE.

Ive been renting for years.

So the theft of our taxes, and the devaluation of the pound in our pockets, via QE, to pay for this toxic mortgage debt.

Is In effect, forcing us to pay for others houses, whilst keeping house prices massively overinflated, ensuring we can never afford our own house. Working for nothing. No capital.

The Labour Party are incompetent economic Fascists. [I could specify the Term Fascists when directed at Labour, if requested. Would be happy to do so. Because it is ACCURATE.]

Look at Japan. 80% housing crash. Look at 50% reductions in greece. Look at the USA.
Look at property everywhere else in the world. Except the UK.

*[RANT NOT over. Rant Been going for Years. RANT will continue for more years without request for apology. Until Country roundly condemns LABOUR]

Houses are massively overpriced.
Everyone I know earns between £12k-£24k per annum.

From 1987 to 1997 the Average House Price rose from £40k to £55k.

A 33.3% rise over ten years.

From 1997 to 2007, the Average House Price rose from £55k to £190k [Nationwide Building Society figures]

A staggering 245.5% increase over the same period. [Ten years.]

The reasons for this are entirely the Labour Parties Fault.

1. “In America, the Glass-Steagall Act had protected deposit-taking commercial banks from the risky activities of the investment banks. Congress was effectively obliged to repeal the Act in 1999 because New York was losing its business to London, which had no such restrictions and the “light touch” regulation encouraged by Gordon Brown. Had Britain [Brown] enacted similar legislation to Glass-Steagall, the US Act would not have been repealed, the City would have made less money but the banking collapse in both America and Britain would have been avoided”
2. Complete failure to build social housing.Labour built , an average of 26,000 fewer homes each year between 1997 and 2009. Under Tony Blair and Gordon Brown, the country witnessed the lowest level of house building in p

It was very moving to see Cameron, who seemed to show nuts-and-bolts compassion, at the Cenotaph, which is in London.
It was even more moving to see all those veterans, who deserve more than the rest of us, at the Cenotaph, which is in London.

I couldn’t help wondering where the veterans went after the ceremony. What with Housing Benefits and stuff.

Fine Jon. So why incessantly prop house prices up? Why reduce rates in 2005 and allow ramping up of lending. Why slash rates in 2008/9?
becasue its politically expedient.
Instead if there were a housing crash (its happening BTW) more would be able to sort out their housign problem. Obvious really.

Fred at 5:49 & 5:51: You are ABSOLUTELY RIGHT in ALL you say. The Labour “government” allowed the banking and property vested interests to completely skew house prices upwards using the fraud of liar loans/fraudulent “self-cert” mortgages – thereby pumping vast, vast amounts of false credit into the system. We now have to live with the terrible consequences of this. It is absolutely evil: WICKED in fact. This country is going to really suffer as a result. Mortgages should NEVER EVER be more than 3 x a single person’s REAL, NON-LIAR income. And millions more houses – and GOOD QUALITY houses, not rabbit hutches – need to be built. The whole situation is absolutely scandalous.

By luck of my age and by luck of growing up in a part of London where the property prices soared, I now have a tiny mortgage by selling and moving out to a cheaper area. I feel ashamed in front of my younger friends, family and colleagues who are condemned to insecure renting because governments allowed houses to be treated as an investment and allowed the financial world to exploit this to the extent that so many became prices out.

Jon – if you haven’t seen it already, look at this thread on a discussion forum to see how the under 35s are forced to subsidise the older generation and forced out of secure living arrangements. Thus this puts responsible youngsters off having families for fear of being forced to move with a young family and forces both parents to work, leading to less parent time for growing children.

The housing market is in a bubble and is in effect acting like a Ponzi scheme. We the only way so a bubble to be corrected is for the Ponzi scheme to fail; no matter how much money the government throw at is for the investors bought into the scheme to loss their money.

The more money the government throw at the problem (via low interest rates, QE, housing benefit, tax relief, currency debasement etc) they will only extend the amount of time the scheme can survive, sucking in more and more people into the scheme. If the government chooses to extend the scheme for an extended period of time, say until the budget defect is under control. Then the professional investors, who entered the market early sell their house to people less able to withstand market re-adjustment which will cause more tax payer’s money to be wasted supporting the market, and probably bailing out the banks once again.

There is an easy to solve the pensions crisis and housing crisis in one go. People must die or be relived of the burden of their lives by the age of 70. If they are still alive at that point, they are put to sleep.

Might seem outlandish now, but give it 25 years and we will start to see serious debate about how to control our spiralling population, both here and globally, as supply of water and the basic foodstuffs we take for granted are not able to keep up with demand. Trouble is it’s such a politically sensitive issue it will be just like the current financial crisis – no one will even admit to it until it is too late, let alone take measures to address it.

As a real example: I’m nearly 29, I have a young child and a wife. I worked hard throughout school and went to university (working in the holidays). I had £20k of debt on leaving university and also needed a £2k bridging loan to pay a deposit for rented accommodation.

Unfortunately, my career has run in parallel to the spiralling rise in house prices and rents over the last 10 years. I earn a good salary but still cannot afford to rent a family house (2-bed flats are a stretch). Small family houses are priced about £100k above the maximum mortgage I can afford. If I save all of my salary after bills I can just about make the ISA limit of £5k a year, having just paid off my loan. However, this is unrealistic as car repairs, emergency spending (dentist, car, loss/theft), and children’s clothes must also come out of this.

My parents did not go to university but could afford to live in areas in which I can never live now. Unfortunately, they never profited from the rise in prices (due to family circumstances) and so cannot help me with a deposit.

Poor policy has caused a rise in inequality between (the lucky and unlucky) of the generations. It is simply wrong.

A more accurate description of Labour, for the millions priced out of housing, would be, [Economic] Fascists.

[The Labour Party are directly responsible for inflating the biggest asset bubble in History. The Housing Market.]

Labour then transferred that debt onto everyone else in society.

So our money is being stolen, through QE, Low IR, increased taxes, mortgate relief, etc, to pay for this toxic mortgage debt, to bail out the banks. In effect, our money is being de-valued and stolen to pay for other peoples houses.

Whilst keeping houses massively overinflated, and ensuring millions can never afford their own small house.

Obviously not a ‘socialist’ or ‘democratic’ act.

The Labour party has implemented policies which support one section of a society, to the extreme detriment of another section of that society [via blatant theft and cronyism]

You think the cuts and the pain are just arriving now. Try working for nothing, for over a decade, and being utterly ignored. No capital. Its soul destroying. [How many who own houses, could afford their houses if they had to buy them right now?]

The most notable characteristic of a FASCIST ideology is the separation and persecution or denial of equality to a specific segment of the population.

The preferred class lives in relative comfort, while the oppressed class lives in a Fascist state.